Jan. 26 (Bloomberg) -- The European Commission aims to
support the region’s cloud-computing industry by encouraging
governments to jointly buy software and computing resources on
the Web, Digital Affairs Commissioner Neelie Kroes said.

The 27-member bloc’s executive arm set up a working group,
dubbed the European Cloud Partnership, with initial funding of
10 million euros ($13 million), Kroes said today in a speech in
Davos, Switzerland. The group of officials, cloud buyers and
suppliers should work on developing common standards and
security requirements across the region to enable concerted
purchases, according to Kroes.

The global market for cloud services, or on-demand
computing resources such as data storage and software
applications via the Web, may grow to $241 billion by 2020 from
$40.7 billion in 2011, according to Forrester Research Inc.
Divergent rules on matters such as data protection make it
harder for companies such as International Business Machines
Corp. and Atos SA to approach customers in a standardized way.

“We need to act to support speedy uptake of cloud
computing in Europe,” Kroes said. “The cloud market will grow,
bringing opportunities for existing suppliers and new entrants.
And cloud buyers, including the public sector, will buy more
with less and become more efficient.”

Microsoft

Kroes said she expects the project to start this year and
begin to show results in 2013. The partnership is “not about
building a European super-cloud” and will not force the
combination of existing infrastructures, she said, adding that
private businesses may follow the logic of the partnership.

“We welcome this and will continue to collaborate with the
EU to make the industry, governments and private people more
secure and more comfortable in adopting cross-border cloud
computing services,” John Vassallo, Microsoft’s head of EU
affairs, said in a telephone interview, adding that his company
is already part of the working group “Those are the ones that
create the scale that enables economic benefit.”

The commission presented a proposal yesterday for
overhauling the EU’s 17-year-old data-protection policies. The
plan includes fines of as much of 2 percent of annual global
sales for companies mishandling or losing personal data, as well
as a requirement to report serious data breaches within 24
hours.

Vassallo said it is “almost impossible” to notify
customers and authorities within 24 hours of a data loss because
affected host companies usually don’t find out about such losses
immediately. Proposed rules which would force companies to ask
Internet users for explicit consent every time they want to
store personal data would create a “disturbing” user
experience, he said.

“There is a willingness in the proposal to achieve
balance, but what we’d like is openness to debate,” Vassallo
said.